Refugees' Remittances to N.Korea 'Growing'

The number of North Korean refugees who remit money to their families in the North is rising. "Some 15,000 North Korean refugees have settled in the country, and over 6,000 of them are remitting money to North Korea," a government official said. "We understand the size of the remittances is also growing." An official with a refugee organization said there must be more than 10,000 who remit money to their families in the North.

If some 6,000 North Korean refugees here send money North, and a refugee remits US$1,000 a year, some $6 million is sent to North Korea per year. To that should be added 20,000-30,000 of the 100,000 North Koreans estimated to live in China. Remittance routes are clandestine. Money is remitted to a Chinese broker, who contacts another in North Korea, who pays the recipient with his own money and settles the account with the Chinese broker later, leaving no documentary trail.

Currencies are usually American dollars and Chinese yuan. Commissions range between 15 and 20 percent, according to sources. "Remittances through brokers designated by North Koreans generally reach the recipient without a hitch, but Chinese brokers contacted in China are liable to steal the money," a refugee said. The brokers handle tens of millions of dollars and are linked to organized gangs.

In the past, remittances required enormous bribes. First a man had to be sent to North Korea to bribe guards, with commissions exceeding 40 percent. But with the emergence of remittance brokers and the establishment of an organized system, the amount of money that reaches North Korean families has increased substantially.

The North Korean won is practically worthless in international exchange. A North Korean workers' average salary was between W2,500 and 3,000 as of the end of 2008. Given that US$1 is traded at W3,200, $1,000 is the equivalent of 100 years' worth of earnings and buys two apartments in places like Chongjin, North Hamgyeong Province, or Hamhung, South Hamgyeong Province.

"In the past, strict punishment of the families of refugees under a guilt-by-association system was effective as a means of discouraging escape,” one refugee says. "Now, leaving them alone helps maintain the system. If neighbors are expelled on account of being families of escapees, rumors make everyone uneasy." If this happened to large numbers, it could increase unrest, leading to a mass exodus, and even the hard core of supporters could turn against the regime.

From the perspective of the regime, the best solution is to try and limit the numbers of refugees, but that is unlikely to succeed unless the system changes drastically.

Accommodating more refugees and letting them support North Koreans in a natural way could prove genuine support to North Korea, refugees say, because the cash flowing into the lowest rung of society functions as a powerful force for opening.